UPDATE 1-Nigeria’s Oando sells 60 pct of downstream business to Vitol

Nigeria’s Oando has agreed to sell a 60 percent stake in its downstream business to Vitol and Helios Investment Partners for $276 million, the energy company said on Tuesday.

Oando, which is shifting away from being a marketer of refined petroleum products into an oil and gas explorer, completed the acquisition of ConocoPhillips’s upstream oil and gas business in Nigeria last year.

Its downstream business, with a market share of 12 percent in Nigeria, will be set up as an independent entity, but will retain the Oando brand, the company said in a statement. The consortium will acquire 51 percent of the voting rights.

Oando’s downstream assets include more than 400 petrol stations in Nigeria and an interest in a bulk distribution company in Ghana, it said. Oando also has listings in Toronto and Johannesburg.

Soros-backed Helios has already partnered with Vitol to distribute Shell-branded fuels and lubricants in 16 African countries and is confident the new deal will capitalise on the 3-5 percent annual growth in Nigerian demand for oil products.

Nigeria exports nearly 2 million barrels per day of oil but imports the bulk of its refined products because its refining capacity is unable to meet its daily fuel consumption of 40 million litres.

Vitol has bought downstream assets such as storage and refineries in Europe, most recently in conjunction with Carlyle Group in the Varo Energy venture.